Start the new tax year strong

With the new tax year allowances in place, now is the time to make smart financial decisions Taking time to review and refine your financial plan can help you stay on track for the future Ensure you’re making the most of the opportunities available – your future self will thank you! 

The new tax year is a great opportunity to take charge of your finances and set yourself up for financial peace of mind by knowing you have a plan in place. 

By planning ahead and making the most of available allowances, you can optimise your wealth, reduce tax liabilities and work towards long-term financial security. Here are some key steps to consider: 

Take advantage of tax-efficient opportunities 

With the new tax year allowances in place, now is the time to make smart financial decisions: 

  • Maximise your ISA allowance  

Contribute up to £20,000 (the current annual allowance) into an Individual Savings Account (ISA) and benefit from tax-free growth 

  • Make the most of your Capital Gains Tax allowance 

Use your annual exemption to minimise tax on investment profits 

  • Boost your pension contributions 

Take advantage of tax relief while also potentially lowering your taxable income 

  • Plan for Inheritance Tax (IHT) efficiently  

Lifetime gifting can help reduce the impact of Inheritance Tax, allowing you to pass on more to loved ones. 

Build a solid financial plan for a stronger financial future  

Taking time to review and refine your financial plan can help you stay on track for the future. With proactive tax planning and disciplined habits, you can build a stronger financial foundation and make informed decisions that align with your long-term goals. Whether you’re looking to grow your savings, invest more efficiently, or plan for retirement, taking action now can make a significant difference. We’re here to help you explore your options and ensure you’re making the most of the opportunities available. Your future self will thank you! 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. The Financial Conduct Authority (FCA) does not regulate tax and trust advice and certain forms of estate planning. 

Time for a spring clean? How about ‘death cleaning’ your finances?

Financial ‘death cleaning’ helps simplify finances, reduce clutter, and ensure loved ones aren’t left with financial burdens Key steps include closing unused accounts, updating documents, maximizing tax efficiency, and reviewing investments Open conversations with family about financial plans support intergenerational wealth planning and a smooth legacy transfer 

Could your finances benefit from a spring clean? You could take your cue from the Swedes. They believe in ‘döstädning,’ or ‘death cleaning.’ It sounds pessimistic, but it involves decluttering your belongings to reduce the burden you leave behind to loved ones. 

The philosophy gained international prominence through a 2018 book called The Gentle Art of Swedish Death Cleaning, by Margareta Magnusson, but many of the methods described to organise your home and belongings can be applied to your finances as well. 

Why should you death clean your finances? 

First, it can help you feel more in control of your money. Second, it can help you refocus your time (and money) on what matters most to you. And third, taking time to organise your finances now could spare your loved ones from a great deal of emotional and financial stress after you die. 

Key steps in a financial spring clean It’s a good idea to make a checklist and work your way through. Key steps include: 

  • Streamline your finances 

Close accounts you don’t use, cancel unused subscriptions or memberships, and explore ways to cut back on wasteful spending 

  • Build a document library 

Gather all important documents, including Wills, insurance policies, investment portfolios and property deeds. Consider storing documents securely online. Having an easily-accessible document library will help make sure your loved ones can find critical information quickly when needed 

  • Keep beneficiary information up to date  

Review and update beneficiary details on life insurance policies, pensions and expressions of wishes to ensure they reflect your current intentions 

  • Revisit your investments 

Are your investments still aligned with your long-term goals? Has your attitude to risk altered? Maybe your circumstances have changed? This information is important. We’ll monitor performance and rebalance when necessary; updating us on goals, risk preference and life changes will inform investment recommendations 

  • Maximise tax-efficiency  

The new tax year brings new opportunities, allowances and reliefs to take advantage of, to reduce your tax liability. This includes revisiting your Inheritance Tax (IHT) strategy, which can help reduce the liability on your estate 

  • Consider your retirement plan 

Are you saving enough into your pension to provide you with the lifestyle you desire in retirement? Are the underlying investments right for you? If you have multiple pension pots, would consolidating them be relevant for your unique requirements? 

Making your plans known to others 

Discussing your financial arrangements with trusted family members and keeping them updated on changes you’ve made, is an important part of the process too. Intergenerational financial planning involves managing wealth and financial strategies across multiple generations of a family, focusing on ensuring financial security, preserving assets and facilitating smooth wealth transfer while considering tax implications, estate planning and family values. They’re really valuable conversations to have. 

Take control 

Spring cleaning your finances is about more than just getting organised, it’s about simplifying your life, taking control and leaving the best possible legacy for loved ones. Maybe those Swedes really are on to something. We can help you get organised so you can focus on enjoying life. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. The Financial Conduct Authority (FCA) does not regulate Will writing, tax and trust advice and certain forms of estate planning. 

Economic Review March 2025

The Chancellor cut welfare and departmental spending to restore a fiscal buffer, but risks to forecasts remain high Inflation dipped unexpectedly but is expected to rise again due to higher energy, taxes and wage costs Business and retail activity showed resilience, but weak manufacturing and trade tensions cloud economic prospects 

Chancellor trims spending plans 

Rachel Reeves delivered her Spring Statement on 26 March, unveiling welfare cuts and spending reductions in order to balance the government’s books in the face of a worsening fiscal outlook. 

The new spending plans were required to ensure the Chancellor stays on track to meet her two self-imposed fiscal rules, which she confirmed remain “non-negotiable.” An updated forecast produced by the Office for Budget Responsibility (OBR) had more than wiped out the Chancellor’s previous £9.9bn fiscal buffer announced in last October’s Budget due to a combination of higher debt interest costs and lower economic growth. 

Several policy changes announced in the Spring Statement, including welfare reforms and day-to-day departmental spending reductions, restored the buffer back to its October level. The OBR did, however, note that its size remains historically low and that the buffer therefore provides only a small margin of error against the risk of future economic shocks. 

Speaking after Ms Reeves delivered her statement, OBR Chair Richard Hughes also acknowledged the precarious nature of economic forecasting and admitted there were many factors that could once again “wipe out” the Chancellor’s fiscal headroom; these include an escalating trade war, a small downgrade to growth forecasts or a rise in interest rates.  

This vulnerability was vividly highlighted just hours after the Chancellor finished her speech, with President Trump’s announcement of a new 25% tariff on cars and car parts coming into the US – a move which is widely expected to hit global growth prospects. 

Analysis by the Institute for Fiscal Studies (IFS) also concluded that the Chancellor’s headroom is ‘very small. IFS Director Paul Johnson added there was a “good chance” economic forecasts would deteriorate significantly before the Autumn Budget which could leave the government facing months of damaging speculation about what taxes might need to be increased. 

Inflation dips but fresh climb predicted 

While the latest batch of inflation statistics did reveal a larger than expected monthly decline in the headline rate, economists continue to warn that price rises are likely to accelerate again soon.   

Figures published last month by the Office for National Statistics (ONS) showed the Consumer Prices Index (CPI) 12-month rate – which compares prices in the current month with the same period a year earlier – dropped to 2.8% in February from 3.0% the previous month. This rate was just below economists’ expectations, with a Reuters poll predicting a reading of 2.9%. 

ONS said February’s decline was primarily driven by lower clothing and footwear prices which fell for the first time in over three years, partly due to an unusually high number of sales during the month. This unseasonal clothes discounting offset small price increases from a number of other categories, including alcoholic drinks. 

Despite the monthly dip, economists still expect a fresh pick-up in the CPI rate over the coming months. Indeed, a number of near-term price rises, such as energy, Council Tax and water bill increases, are already baked in, while surveys suggest many businesses will look to raise prices in response to April’s National Insurance and Living Wage increases. 

Last month also saw interest rates remain on hold, following the latest meeting of the Bank of England’s interest-rate setting committee. At its 19 March meeting, the Bank’s nine-member Monetary Policy Committee (MPC) voted by an 8-1 majority to leave Bank Rate unchanged at 4.5%; the one dissenting voice preferred a 0.25 percentage point reduction.  

Commenting after announcing the decision, Bank Governor Andrew Bailey said he still believed rates were on a “gradually declining path” but noted that increasing geopolitical and global trade uncertainties meant the Bank would have to be “careful” when considering future cuts. The next MPC announcement is scheduled for 8 May. 

Markets  

At the end of March, concerns weighed on financial markets, days before Donald Trump’s tariff plans are due to take effect. Investors are braced for a broad set of tariffs, set to be unveiled on April 2 – described as ‘Liberation Day’ by the President. 

In the UK, the FTSE 100 index closed the month on 8,582.81, a loss of 2.58%. The mid-cap focused FTSE 250 closed the month down 4.19% on 19,475.48, while the FTSE AIM closed on 681.99, a loss of 3.10%.  

Across the pond, the Dow closed March down 4.20% on 42,001.76, while the tech-orientated NASDAQ closed the month down 8.21% on 17,299.29. On the continent, the Euro Stoxx 50 closed March 3.94% lower on 5,248.39. In Japan, the Nikkei 225 ended the month on 35,617.56, a monthly loss of 4.14%. 

On the foreign exchanges, the euro closed the month at €1.19 against sterling. The US dollar closed at $1.29 against sterling and at $1.08 against the euro.  

Brent Crude closed March trading at around $74 a barrel, a monthly gain of just over 7.0%. Oil moved higher after Donald Trump suggested that the US could impose secondary tariffs on Russia, a major exporter. The OPEC+ producer’s crude exports hit a five-month high in March. Gold closed the month trading around $3,149 a troy ounce, a monthly gain of almost 10.00%. The gold price reached a trading high on 31 March as concerns intensified over an escalating trade war, prompting investors to flock to the safe-haven asset. 

Survey reports uptick in business activity 

Although the latest monthly economic growth statistics did reveal an unexpected contraction at the start of the year, more recent survey evidence points to a “modest expansion” in March. 

Figures published last month by ONS showed the UK economy shrank by 0.1% in January, driven by a sharp decline in manufacturing output; in contrast, a Reuters poll had predicted a monthly growth rate of 0.1%, following December’s 0.4% expansion. While ONS said the economy was still estimated to have grown by 0.2% across the three months to January, it also noted the overall picture was one of ‘weak growth.’ 

Data from the recently released S&P Global/CIPS UK Purchasing Managers’ Index (PMI) does point to a subsequent pick-up in activity, with March’s preliminary headline growth indicator hitting a six-month high of 52.0. This upturn, though, was driven by only small pockets of growth, most notably in financial services, with manufacturers continuing to struggle. 

S&P Global Market Intelligence’s Chief Business Economist Chris Williamson said, “The signal from the flash PMI is an economy eking out a modest expansion in March, consistent with quarterly GDP growth of just 0.1%. However, just as one swallow does not a summer make, one good PMI doesn’t signal a recovery.”  

Retail sales unexpectedly rise 

The latest official retail sales statistics showed that sales volumes defied analysts’ expectations by rising in February, while survey evidence points to a continuing modest pick-up in consumer sentiment. 

Figures released last month by ONS revealed that retail sales volumes grew by 1.0% in February, with broad-based strength reported across all major categories except food stores sales. This loosening of consumer purse-strings came as a surprise to most analysts, with a Reuters poll of economists actually predicting a 0.4% monthly contraction. 

Data from GfK’s most recent consumer confidence survey also reported further modest improvement in the overall level of consumer sentiment. While March’s headline figure remained below the survey’s long-run average of -10, consumer morale was buoyed by greater optimism in economic prospects and ticked up to a three-month high of -19. 

Evidence from the latest CBI Distributive Trades Survey, however, shows the retail environment remains challenging. According to the survey, annual sales volumes fell ‘markedly’ in March with retailers predicting a further decline, albeit at a slower pace, in April too. Firms across the retail and wholesale sectors suggested ‘global trade tensions,’ as well as last Autumn’s Budget decisions, were weighing on confidence and leading to a reduction in demand. 

All details are correct at the time of writing (01 April 2025) 

It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission. 

News in Review

US President Trump disrupted the global trade system by introducing tariffs on ‘Liberation Day’  Global markets continue to be highly volatile following the announcement The government is to help the UK car industry cope with tariffs by relaxing electric vehicle (EV) sales targets 

“This is one of the most important days… in American history. It’s our declaration of economic independence” 

On what Trump called ‘Liberation Day’ last Wednesday, the US president disrupted the global trade system by introducing tariffs of more than 40% on key trading partners. From 5 April, most countries trading with the US faced a minimum tariff of 10%. Some will be hit much harder, with rates rising as high as 50%. Trump professed, “This is one of the most important days… in American history. It’s our declaration of economic independence.” 

These new measures follow earlier tariff announcements, meaning Chinese goods will now face combined duties of 54% from 9 April. Other countries affected include the European Union, with tariffs of 20%, Japan at 24%, South Africa at 30%, Vietnam at 46% and Thailand at 36%. The UK is subject to the baseline 10% tariff. Other countries facing the 10% baseline tariff include Australia, New Zealand, Argentina, Brazil, the United Arab Emirates and Turkey. 

Global stock markets volatile as Trump stays firm  

More than $5trn was wiped off the value of the S&P 500 index last Thursday and Friday, marking the worst week for US stocks since the start of the pandemic in 2020. When asked about the steep falls, Trump said, “Sometimes you have to take medicine to fix something.”  The sharp losses suffered by global stock markets continued on Monday after Trump said he would not soften his stance on trade, despite growing concerns about a possible global recession.  

Markets were highly volatile again on Monday trading, with the FTSE 100 dropping by 5.1% and Hong Kong’s Hang Seng index falling by more than 13%, its steepest one-day drop this century.  

US stocks sank sharply again on Tuesday despite starting off the session with decent gains, sending the S&P 500 to its lowest close in 14 months. 

In recent days, investors have turned to safe-haven assets, pushing bond prices higher and yields lower. Commodity markets were also under pressure, with Brent crude, the international benchmark, falling by around 2%. Copper, a key industrial metal often seen as a barometer of global economic health, dropped 4%. 

Goldman Sachs raised the odds of a US recession from 35% to 45%, citing ‘a sharp tightening in financial conditions’ since the tariffs were announced.  

Extra 50% tariff on China  

In retaliation, China announced a 34% duty on US goods on Friday. However, on Monday, President Trump said he would impose additional 50% tariffs on all goods from China, if Beijing did not withdraw its 34% retaliatory tariffs. The response to that from China was, ‘If the US insists on its own way, China will fight to the end.’ 

According to a spokesperson at the Ministry of Commerce, China has filed a lawsuit with the World Trade Organization (WTO), saying the tariffs violate WTO rules and undermine ‘the rules-based multilateral trading system and the international economic and trade order.’ 

UK to relax electric car rules as US tariffs hit 

The government announced plans to help the UK car industry cope with trade tariffs by relaxing electric vehicle (EV) sales targets. While the ban on selling new petrol and diesel cars will still be introduced from 2030, manufacturers will now have more flexibility on annual sales targets and face lower fines for missing them.  

The US has imposed a 25% tariff on cars imported from the UK, affecting one of the UK motor industry’s most important export markets. This came into effect last week and is in addition to a 10% tariff on nearly all UK goods announced on Wednesday. 

Transport Secretary Heidi Alexander said the move was not a “silver bullet”, but part of a wider strategy to respond to the tariffs. Although a consultation on the EV rules closed in mid-February, Alexander told the BBC the government had fast-tracked the changes because of the latest trade developments.  

Speaking at a Jaguar Land Rover plant in the West Midlands, Prime Minister Keir Starmer said Trump’s decision to increase tariffs posed “a huge challenge for our future” but said his government would “shelter British business from the storm” with a more active industrial policy. 

Here to help 

Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

All details are correct at time of writing (9 April 2025) 

News in review

Chancellor Rachel Reeves announced spending cuts but no tax increases, aiming to save £14bn by 2029/30 The UK growth forecast was revised to 1% in 2025, with improvements expected later in the decade UK retail sales fell for a sixth month and looming US tariffs threaten the car industry 

“The global economy has become more uncertain” 

Chancellor Rachel Reeves delivered the government’s Spring Statement on 26 March, with spending cuts taking centre stage – and no further tax rises announced. 

As had been widely expected, Ms Reeves announced further reductions to welfare spending within a package of reforms designed to raise £14bn by 2029/30. According to forecasts by the Office for Budget Responsibility (OBR), welfare cuts are estimated to save £4.8bn. 

Meanwhile, an additional £2.2bn of funding was made available for the Ministry of Defence in 2025/26, such that the government will increase defence spending to 2.5% of GDP; Ms Reeves pledged “to make the UK a defence industrial superpower.” To compensate for the rising defence budget, overseas aid has fallen to 0.3% of Gross National Income, as had been set out prior to the Spring Statement. 

The government also released confirmation that it is considering reforms to Individual Savings Accounts (ISAs). The plans would seek to boost savers’ returns and the government’s growth goals, for example by nudging more savers from Cash ISAs to Stocks & Shares ISAs. Specifically, the government is reportedly weighing up a split to the current £20,000 allowance for all ISAs into targeted caps, though no changes have been made for now.  

The Chancellor outlined the OBR’s latest assessment of the UK economy, notably a revised growth forecast of just 1% for 2025. Despite the poor short-term forecast, the OBR’s estimates now look brighter for the rest of the decade, with increases to growth figures for each of the subsequent four years.  

In a separate release last week, the latest inflation figures from the Office for National Statistics (ONS) revealed that prices in the UK rose by 2.8% in the 12 months to February. Ms Reeves expressed disappointment with the growth data but noted that the latest spending cuts have restored the government’s planned headroom, with a surplus of £9.9bn still expected in 2029/30. 

Other key measures announced included: 

  • Confirmation of a new £3.25bn fund to support the reform of public services and seize opportunities from digital technology and Artificial Intelligence (AI) 
  • Plans to increase the number of tax fraudsters charged every year by 20% 
  • Confirmation of an additional £2bn in social and affordable housing in 2026/27. 

“The global economy has become more uncertain,” remarked Ms Reeves during her Statement, “as trading patterns become more unstable and borrowing costs rise for many major economies.” 

She added, “The job of a responsible government is not simply to watch this change. This moment demands an active government.” 

Government support urged for UK car makers 

UK car firms reportedly met with industry minister Sarah Jones on Friday, faced with the looming threat of 25% tariffs on US car imports set to come into force at midnight on 3 April. 

Hopes of a deal with President Donald Trump over import levies have faded in recent weeks, leaving car companies scrambling for government reassurances that they will have access to support. Mr Trump has been explicit in saying that there will be no carve-outs for car imports. 

Official figures put the cost of US tariffs on the UK economy at a 1% reduction in growth in a worst-case scenario. 

Another decline in UK retail sales 

Retail sales in the UK dropped sharply in March, according to the latest Distributive Trades Survey released last week by the Confederation of British Industry (CBI), a sixth consecutive month of falling volumes. 

In total, sales volumes dropped by a weighted balance of -41% in March, down further from -23% in February. Although the downturn is expected to ease slightly in April, sales volumes are still expected to decline by -30%. 

UK housing affordability improves in 2024 

In more positive economic news, the house price-to-income ratio in England and Wales returned to pre-pandemic levels, according to newly released government data. While house prices have risen by 1% since 2021, average earnings have grown by 20% over the same time span, the ONS’ annual housing affordability report found, providing a welcome boost to homebuyers. 

Specifically, the median average home in England in 2024 (£290,000) cost 7.7 times the median average earnings of a full-time employee (£37,600), meaning that affordability has returned to its pre-pandemic range. 

Here to help 

Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

All details are correct at time of writing (2 April 2025) 

When is the right time to buy your first home? 

Changes to Stamp Duty and mortgage rates may make now a good time for first-time buyers. House prices are predicted to rise in 2025, though at a slower pace than before. Lower mortgage rates have boosted first-time buyers’ budgets, but personal circumstances should guide decisions. 

There is a lot to think about when purchasing your first home and, with a changing housing market, it can be hard to know if it’s the right time to buy. Changes to Stamp Duty in England are worth tuning into and will no doubt be a contributing factor if you’re on the cusp of deciding. Getting a foot on the ladder before rates revert could save you thousands, but competition for properties could be fierce. Here are a few other things to consider. 

House prices and mortgage rates  

It is widely predicted that prices will increase in 2025 but at slower pace than before. Meanwhile, the August and November reductions to Bank Rate have prompted some mortgage rates to reduce in recent months. Rates may tend to keep dropping modestly but experts believe that, in the long run, the ‘new normal’ mortgage rate will be higher than the levels seen in the last decade. 

Current FTB sentiment 

The fall in mortgage rates in the year to September 2024 prompted monthly repayments to go down by £97 for the average FTB1. As a result of this saving, new homeowners are willing to spend £3,400 more on a property than they were in 2023. 

What is your current situation? 

The right time to buy will be different for everyone. Buying your first property is likely to be the biggest purchase you have ever made, so it’s important to seek professional advice. We can help you make an informed decision, so you feel empowered to take your first step onto the property ladder this year. 

1Zoopla, 2024 

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments. Financial protection policies typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse. 

Protection insurers pay out record sum

In 2023, protection insurers paid out a record £7.34bn in claims in, supporting those facing bereavement, illness and injury. The total value of critical illness claims rose to £1.2bn, with cancer the most common reason for claiming.  Over 1,660 income protection claims have been paid out for more than 10 years, highlighting the value of insurance. 

Latest data1 reveals a record £7.34bn was paid out in protection claims in 2023, supporting those facing bereavement, illness and injury. This equates to around £20.1m in daily payouts, underscoring the vital role of protection insurance in safeguarding financial stability. 

Individual protection policies accounted for £4.85bn of this total, covering more than 275,000 claims across life insurance, income protection and critical illness. Notably, the total value of individual critical illness claims rose to a record £1.2bn, a 13% increase from 2022. The average critical illness claim reached £67,267, with cancer remaining the top cause for claiming, amounting to a total of £777m in claims in 2023. 

Income protection claims also saw a rise year-on-year, totalling £177m – up by 2% from the previous year. While musculoskeletal issues led the number of claims, mental health issues represented the highest total claim values at £37m. Significantly, over 1,660 income protection claims have now been paid out for more than 10 years, with 376 of these extending over 20 years, highlighting the long-term benefits of such cover. 

Reassuringly, claims acceptance remains high, with 98.3% of claims approved, reflecting the reliability of protection policies. However, common reasons for declined claims include non-disclosure of pre-existing conditions or not meeting policy criteria. 

These figures emphasise the importance of protection insurance for financial security in times of need. For valuable peace of mind, discuss your protection needs with us. 

1ABI and GRiD, 2024 

Financial protection policies typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse. 

Spring Statement 2025

“A serious plan for growth”

On 26 March, Chancellor of the Exchequer Rachel Reeves delivered her Spring Statement unveiling updated economic forecasts from the Office for Budget Responsibility (OBR), announced further reductions to welfare spending and confirmation of a rise in defence spending. The Chancellor reiterated her commitment to “just one major fiscal event a year,” with no further tax rises announced. Ms Reeves stated that her task was to “secure Britain’s future in a world that is changing before our eyes” adding that the government has “a serious plan for growth.”

Fiscal rules “non-negotiable”

The Chancellor began her Statement by saying Labour had been elected to “deliver a decade of national renewal” before listing the government’s achievements during its first nine months in office.

Ms Reeves went on to say that the updated OBR forecast showed that, without the actions she was delivering in her Statement, the 2029/30 budget would have been in deficit by £4.1bn. However, the OBR estimates that her policy changes, including welfare reforms and day-to-day departmental spending cuts, have restored in full the government’s planned headroom, with a surplus of £9.9bn still expected in 2029/30.

Economic forecasts

The Chancellor outlined the OBR’s latest assessment of the UK economy, with the independent forecaster predicting a much slower pace of growth this year than previously expected. Ms Reeves acknowledged she was “not satisfied with these numbers” when detailing a growth forecast of just 1% for 2025, a significant downgrade from October’s 2% prediction. The OBR has, however, increased its growth forecasts for each of the following four years.

Ms Reeves also mentioned that the OBR had raised this year’s forecast for Consumer Price Index inflation to 3.2% although the rate was expected to fall back to the Bank of England’s 2% target by 2027. In addition, the Chancellor noted that the OBR’s projections show real household disposable income will grow “at almost twice the rate” previously anticipated.

Other key measures announced include:

Defence

  • An additional £2.2bn funding for the Ministry of Defence (MOD) in 2025/26.

Transformation Fund

  • Confirmation of the creation of a £3.25bn fund to support the reform of public services and seize opportunities from digital technology and Artificial Intelligence (AI).

Tax

  • Plans to increase the number of tax fraudsters charged every year by 20%
  • HMRC to use cutting-edge tech to combat tax avoidance.

Housing

  • Confirmation of an additional £2bn in social and affordable housing in 2026/27
  • £625m over four years to boost training for skilled construction workers in England
  • The OBR confirms that housebuilding is now projected to reach a 40-year high – 1.3 million homes over the next five years.

Investments

  • The government is looking at options for reforms to Individual Savings Accounts (ISAs) to get the right balance between cash and equities to earn better returns (though not guaranteed) for savers
  • Working with the government, the Financial Conduct Authority will deliver targeted support to give people the confidence to invest and mitigate the risks.

A reminder of some key tax measures previously announced in the Autumn Budget 2024:

  • The rate for Business Asset Disposal Relief and Investors’ Relief will increase to 14% from 6 April 2025 and then to 18% from 6 April 2026
  • Inheritance Tax (IHT) nil-rate bands will stay at current levels until 5 April 2030. From 6 April 2027 most unused pension funds and death benefits will be included within the value of a person’s estate for IHT purposes, following initial and technical consultations on draft legislation
  • Annual subscription limits remain at £20,000 for ISAs, £4,000 for Lifetime ISAs and £9,000 for Junior ISAs and Child Trust Funds until 5 April 2030
  • The Enterprise Investment Scheme and Venture Capital Trusts are extended to 2035
  • The Income Tax Personal Allowance and higher rate threshold remain at £12,570 and £50,270 respectively until April 2028. From April 2028, these personal tax thresholds will be uprated in line with inflation.

The Chancellor closed her Statement saying, “Delivering security for our country and security for working people – that is what drives this government. That is what drives me as Chancellor… and that is what drives the choices that I have set out today.”

It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding of the Spring Statement, taxation and HMRC rules and can be subject to change in future. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK; please ask for details. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor.

 All details are believed to be correct at the time of writing (26 March 2025).

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.

News in Review

We have to be quite careful at this point in how we calibrate our response 

Last week, the Bank of England’s Monetary Policy Committee (MPC) held Bank Rate at 4.5%, a widely expected move but one that was more emphatically supported than analysts had predicted. 

At its meeting on 19 March, eight MPC members voted to maintain Bank Rate at 4.5%, with the sole dissenting voice seeking instead a quarter-percentage point reduction to 4.25%. Indeed, one member who had voted for a 0.5% cut last month, this time sided with the majority in opting to keep Bank Rate at the same level. 

In announcing the outcome, the Committee noted that ‘substantial progress on disinflation over the past two years […] has allowed the MPC to withdraw gradually some degree of policy restraint,’ even if more needs to be done to ‘continue to squeeze out persistent inflationary pressures.’ 

Explaining its decision to take a ‘wait-and-see’ approach, the MPC made reference to growing economic issues, including global trade policy uncertainty, especially in the wake of US President Donald Trump’s tariff announcements. “We have to be quite careful at this point in how we calibrate our response because we’re still seeing a very gradual fall in inflation,” Governor Andrew Bailey commented, before adding “we need to accumulate the evidence.” The MPC has until 8 May, when its next meeting is scheduled, to do so. 

Same story for the Fed 

Similarly, the Federal Reserve last week held its benchmark interest rates unchanged at its March meeting, a decision that means the range of 4.25% to 4.5%  hasn’t shifted since December. 

At the meeting, the Fed also maintained its forecast for two cuts in 2025. Commenting on the decision, Fed Chair Jerome Powell stressed the need for patience, “We do not need to be in a hurry to adjust our policy stance, and we are well-positioned to wait for greater clarity,” he said, adding “the right thing to do is to wait […] for greater clarity about what the economy’s doing.” 

UK wage growth stays strong 

Back in the UK, the latest employment release from the Office for National Statistics (ONS) showed that wage growth had stayed strong in the three months to January.  

Wages, excluding bonuses, grew by 5.9% in that period, according to the latest release, matching the strong showing a month earlier. With wage growth continuing to outstrip inflation, which stood at 3% in January, analysts note that these robust earnings could be responsible for Bank Rate staying higher for longer. Indeed, wage increases have exceeded inflation since July 2023. 

Meanwhile, the rate of unemployment remained at 4.4% at the start of 2025, giving rise to a labour market that is “relatively unchanged,” according to Liz McKeown, ONS Director of Economic Statistics. 

“The wider labour market picture is relatively unchanged, with the number of employees on payroll broadly flat in the latest period and with little growth seen over much of the last year,” she said. 

UK consumer confidence creeps higher 

Confidence among UK consumers ticked upwards for a second consecutive month in March, according to the latest GfK Consumer Confidence Index, released on Friday. The Index rose to a three-month high of -19 in March. The reading remains below the survey’s long-run average of -10. “The current stability is to be welcomed but it won’t take much to upset the fragile consumer mood,” commented Neil Bellamy, GfK’s Consumer Insights Director. 

Chancellor to give economic update in Spring Forecast 

Chancellor Rachel Reeves was expected to provide updates on her plans for welfare spending, aid and defence, among other things at the Spring Forecast on Wednesday 26 March. Ms Reeves has downplayed the Spring Forecast’s significance, having committed to holding just one major economic event each year in the name of stability. 

Even so, Ms Reeves faces a tricky balancing act after official figures revealed last week that government borrowing rose to £10.7bn in February. This total far outstripped the £6.5bn predicted by the government’s independent forecaster and has led analysts to expect the announcement of spending cuts to meet the government’s self-imposed rules for the economy. 

There was a surprise announcement early on Tuesday as the Chancellor vowed £2bn in grant funding to deliver up to 18,000 new homes in England. The funding is described by the government as a ‘down payment on the June spending review.’ 

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Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

All details are correct at time of writing (26 March 2025) 

Residential Property Review – March 2025

Housebuilding falls to seven-year low as planning delays persist 
 

Housebuilding in England has dropped to its lowest level since 2017, excluding the pandemic period, with just 217,911 new homes completed in 2024.  
 
This marks a 6% decline from 2023’s total of 231,000 and continues a four-quarter trend of falling completions, according to Energy Performance Certificate (EPC) data. Completions have slowed across all tenures and builder sizes, though affordable housing has remained relatively stable. Planning delays remain a major obstacle, with 88% of developers citing them as a constraint, according to the Home Builders Federation (HBF). 

Beyond delays, the number of homes gaining planning consent remains low. Around 245,000 homes were approved in 2024, in line with 2023, but well below the 370,000 needed annually. While permissions outpaced completions by 12%, the supply gap continues to widen, restricting growth.  

Edinburgh retains top spot for residential investment 
 

Edinburgh has kept its position as the UK’s top city for residential investment, according to Colliers’ analysis.  

The top four cities – Edinburgh, Glasgow, Manchester and London – were unchanged, while Reading climbed six places to fifth, driven by strong start-up growth and a projected 2.5% annual gross domestic product (GDP) increase. Reading also leads in leisure facilities, making it an attractive investment location. 

Andrew White, Colliers’ Head of Residential, said, “After a number of years of turbulence and macroeconomic challenges, it’s interesting for investors to observe that there’s been a period of stability in the UK housing market, with locations that have been sure investments in recent times remaining at the top. The Scottish cities are continuing to top our ranking, most likely due to the affordability and strong economic qualities of the region, as well as the quality-of-life indicators we consider.” 

Rental growth slows to lowest level in over three years 

The pace of rental growth in the UK has slowed to its lowest level in three-and-a-half years, according to Zoopla. 

The average rent for a new let reached £1,284 per month, up 3% from last year, but affordability pressures are keeping increases in check. Zoopla found that while rental market conditions have improved after three years of demand exceeding supply, the shortage of rental homes continues to drive up prices. Rental demand has eased throughout the UK over the past year, with supply increasing everywhere except the West Midlands. 

Richard Donnell, Executive Director at Zoopla, said, “Affordability remains the primary constraint on rental inflation, rather than increased supply and greater choice of homes for rent. We expect rents to increase by 3-4% over 2025 as slower growth in large cities is offset by faster growth in more affordable markets.”  

Nearly 74,000 home movers in England set to miss Stamp Duty deadline 

Thousands of first-time buyers (FTBs) are set to miss out on the current Stamp Duty savings, with Rightmove estimating more than 25,000 property purchases will complete in April rather than before the 31 March deadline. 

From 1 April, the threshold at which FTBs start paying Stamp Duty in England and Northern Ireland will drop from £425,000 to £300,000, while for other buyers, the tax-free band will shrink from £250,000 to £125,000. Rightmove’s analysis, based on properties sold subject to contract and typical transaction timelines, suggests FTBs completing in April rather than March could collectively pay an extra £34m in Stamp Duty. 

Rightmove also estimates nearly 74,000 home movers in England will just miss the deadline, leading to an additional £142m in Stamp Duty payments. The south east has been identified as the region most affected by the changes. 

It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission. 

All details are correct at the time of writing (19 March 2025)